Political Notes- 2/23/06


Legislators Balk at Arab Presence on U.S. Ports

Faced with the prospect of an Arab-held company managing operations at the Port of Philadelphia, two Delaware Valley legislators basically told President Bush last week, "not in our backyards."

On the heels of the Feb. 13 announcement of the administration-backed $6.8 billion takeover by Dubai Ports World of Peninsular & Oriental Steam Navigation – which controls a 50 percent stake in Delaware River Stevedores, operator of most of the port's facilities – Reps. Curt Weldon (R-District 7) and Robert Brady (D-District 1) urged Bush to "closely examine this decision, and to act to prevent its implementation."

Citing security concerns, the pair argued that the transfer of P&O's assets – the London-based firm also handles operations at ports in such cities as New York; Baltimore; and Newark, N.J. – to the United Arab Emirates-owned company would place America's gateways at risk to a terrorist attack.

The acquisition "would transfer a vital national defense asset to a foreign nation in an unstable region," they wrote.

Other lawmakers on Capitol Hill joined the dissent after news surfaced that the Committee for Financial Investment in the United States – a White House advisory group – approved of the sale.

Sens. Hillary Rodham Clinton (D-New York) and Robert Menendez (D-N.J.) led the charge in the Senate and planned to introduce legislation banning the sale later this week. Sen. Rick Santorum (R-Pa.) also criticized the deal.

Administration officials, as well as executives with P&O and DPWorld, defended the transaction.

They pointed out that port operations have for years largely been controlled by foreign companies, and that federal agencies would continue to handle security operations at the sites.

Speaking on CNN's "Late Edition" program on Sunday, Secretary of Homeland Security Michael Chertoff said that any foreign-investment project is scrutinized for potential security risks before the government signs off on it.

Said Chertoff: "We have to balance the paramount urgency of security against the fact that we still want to have a robust global trading system."

According to Port Security Update, an industry newsletter, DPWorld would be the first Arab firm to manage U.S. ports.



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